What Is A Debt Relief Order?

 

Debt Relief Orders are a formal insolvency process. They help people with serious debt problems to move forwards. They're referred to as a DRO.

 

With a Debt Relief Order in place, creditors cannot act to recover debt. Discharge from the DRO process (and from your debts) takes place after a year.

 

The application fee for a DRO is £90. The bankruptcy fee in England and Wales is £680. A Debt Relief Order is a low-cost debt solution.

 

Do you qualify for a DRO?

 

You must live in England, Wales, or Northern Ireland. You cannot live in Scotland.

 

Your total debts must be below £20,000.

 

You cannot own your home.

 

Your assets (in total) must be worth under £1,000. Assets do not include regular household objects or similar basics.

 

You can own a vehicle for which you have a fair need. The vehicle must be worth under £1,000.

 

Your spare income cannot be more than £50 per month. This takes into account your bills and other costs. If you receive benefit income, a DRO may be suitable. Plenty of people in paid work also qualify.

 

Applying for a DRO

 

To apply for a DRO, you must approach an “approved intermediary”. You can contact the Money Advice Service to find one to help you. Bright Oak does not directly provide DRO services.

 

If you’re near £20,000 of debt, don't delay. Interest (or further debt) may mean that you no longer qualify if the debt increases.

 

A joint Debt Relief Order does not exist. Couples can each apply for their own DRO.

 

The one-off payment to apply for a DRO is £90.

 

Downsides

 

Your details will be added to a public insolvency register.

 

It will have a serious effect upon your credit rating.

 

Summary

 

Many people with debt worries look for an IVA or debt management plan. The promotion of these debt solutions is widespread.

 

Debt relief orders don't receive the same publicity. Despite this, they are a better option for a lot of people.

 

If you qualify for a DRO, it may be the cheapest and quickest way to clear your debts.

 

For debt help, please contact our friendly expert advice team today.

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